Entre. CH 12 Vocab TALH Flashcards
(18 cards)
Expenses
The costs of operating a business
Profit
If revenue is greater than expenses
Loss
If expenses are greater than revenue
Last step in budgeting process
To explain the budget to people who need financial information to make decisions
Cash budget
An estimate of the actual money received and paid out for a specific period
Technology is
Changing the way financial information is collected, prepared, and maintained (mainly electronic, rather than manual/paper)
Revenue
All income that a business receives over a period of time
Payroll
The financial record of employee compensation, deductions, and net pay
Payroll taxes
Income taxes
Social security taxes
Medicare taxes
Unemployment taxes
Payroll records
Documentation used to record each employees pay history
Earnings report (pay stub)
Record of the amount of pay and the type and amount of deductions made for each employee
Direct deposit
Employer transfers net pay electronically into the employees bank account
Financial performance ratios
Comparisons of a company’s financial elements that indicate how well the business is performing
Current ratio
Tells you if the business can pay its debt as they become due
Debt to equity ratio
(Liabilities divided by the owners equity) tells you how much the business is relying on money borrowed from others
Return on equity ratio
Shows the rate of return the owners are getting on the money they invested in the company
Net income ratio
The total sales compared to the net income for a period such as six months or a year
Discrepancies
Differences between actual and budgeted performance
